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In this April 30, 2014 file photo, Specialist Glenn Carell, foreground, works with traders on the floor of the New York Stock Exchange. (AP)
In this April 30, 2014 file photo, Specialist Glenn Carell, foreground, works with traders on the floor of the New York Stock Exchange. (AP)

Premarket: World stocks trade cautiously ahead of U.S. jobs data Add to ...

Global markets traded cautiously on Friday as uncertainty ahead of U.S. employment figures and tensions in Ukraine pushed the yield on 10-year German Bunds to their lowest in a year.

The move into the relative safety of government bonds, also including higher-yielding peripheral euro zone paper that pushed returns on Spanish 10-year debt to a multi-year low, came despite upbeat corporate merger and acquisition activity and earnings.

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The big data focus is the U.S. April nonfarm payrolls report. Economists predict jobs growth of 210,000 and a fall in the unemployment rate to 6.6 per cent.

But first quarter U.S. growth estimates are being cut following weak construction data on Thursday to the point that the world’s largest economy might actually have contracted.

That, and an escalation in violence in eastern Ukraine between government forces and pro-Russian separatists, weighed on investor sentiment.

European stocks failed to get a boost from U.S. drugmaker Pfizer raising its offer for Britain’s AstraZeneca or a forecast-busting profit from Royal Bank of Scotland that lifted shares in the 81 per cent state-controlled bank by 11 per cent.

“People are a bit nervous about payrolls. Last month there was so much hype about it and it came out below expectations. They don’t want to get caught out twice, so they are hedging their positions,” said Michael Hewson, senior markets strategist at CMC Markets in London.

Hewson also noted that many European and U.S. indices are at or close to record highs so investors are reluctant to chase them higher, especially ahead of a long holiday weekend in Britain.

At 0800 GMT, the FTSE Eurofirst 300 index of leading European shares was down 0.1 per cent at 1353 points and Germany’s DAX was down 0.2 per cent at 9585 points. Britain’s FTSE 100 index was flat at 6807 points and France’s CAC 40 down a third of one per cent at 4471.

In Asia, the MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.4 per cent. China’s markets were closed on Friday.

U.S. stock futures pointed to a flat open on Wall Street.

Two corporate stories grabbed the headlines in Europe. Pfizer raised its bid for AstraZeneca to 50 pounds a share, valuing the UK drugmaker at 63 billion pounds ($106-billion), and RBS posted a 1.6 billion pounds profit in the first quarter.


Germany’s 10-year government bond yield slipped to 1.45 per cent and the 30-year U.S. bond yield was 3.43 per cent. Late on Thursday it fell as low as 3.4 per cent.

Spain’s 10-year yields fell as low as 3 per cent, their lowest since September 2005 and close to the lowest ever.

Currency markets were calmer, with the dollar well supported ahead of the U.S. payrolls report but major currency pairs trading in tight ranges.

The euro slipped 0.1 per cent to $1.3853, and the dollar rose 0.1 per cent against the yen to 102.45 yen.

In the commodities markets, oil remained top-heavy after slipping Thursday on disappointing Chinese manufacturing activity and data showing U.S. crude stocks rose last week to their highest level since 1982.

U.S. crude futures brushed that aside, however, and rose 0.4 per cent to $99.487 a barrel.

London copper was on track to log its biggest weekly loss in seven weeks, weighed by the Fed’s decision this week to continue tapering its stimulus, which had provided the commodity markets with liquidity.

But in tandem with oil, three-month copper on the London Metal Exchange recovered ground in early European trading to rise 0.2 per cent to $6,657.00 a tonne. Copper prices have dropped about 1.6 per cent this week.

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